It is a tired old cliche that foreigners tire of quickly in Seoul. "This country," say proud Koreans with their chests puffed out and chins raised high, "is one of the world's technological leaders."

Every Korean seems to be able to trot off this so-called fact, but as an IT journalist, I am often at odds with this statement. I cannot help asking myself just where this opinion comes from.

Mobile technology Although Korea was one of the first pioneers of 3G technology, it is only in recent months that 3G video phones have become available on the peninsula . while European IT dinosaurs have been using 3G phones for several years now.

PCs, perhaps Koreans often turn their noses up at the idea that China is a serious force in technology, but the Organization for Economic Cooperation and Development found that IT exports from China and Taiwan surpassed Korea and even the USA as far back as 2005.

However, there is one area of IT where Korean industries do all but reign supreme. The humble semiconductor is one of the best exports from this country, and three of the biggest semiconductor companies in the world hail from these shores - in Samsung, Hynix and LG.

But, according to some analysts, big companies here might have to change their outlook if they want to stay big. For the uninitiated, a semiconductor is a material which can variably conduct electricity. It is a basic component of a whole host of electronic devices. Computer chips are made up of semiconductor materials. This includes both those which are used for memory, like RAM, and for non-memory or Central Processing Units (CPUs).

They might look a lot less impressive than a shiny new iPhone or a tiny Japanese laptop computer, but without those little black squares of plastic, none of today's modern gizmos would work.

According to a McClean Research report, Samsung is still the biggest semiconductor company on the planet in terms of capital expenditure, and Hynix is the third.

Lee Myung-jong is Marketing Manager for the Korean division of Taiwen Technology, Hong Kong-based semiconductor distributors. Lee believes that this consistent spending on Research and Development from the big boys of the Korean semiconductor industry has ensured that Korea has kept up with the pace of the Americans and the Japanese.

He says: "Korea is right up there with the US and Japan in terms of semiconductors. Samsung and Hynix are good examples of what it takes to make a successful semiconductor business; they have continued to spend big money on developing better products to stay at the top of the international pile."

SEMI, a worldwide semiconductor industry association, reports that equipment orders in Korea have gone up by 16% from 2006 to the same time in 2007. The USA was down 13% over the same period.

However, the same report offers some more worrying statistics for Korea with Chinese and Taiwanese equipment orders both up over 80%. While Japan and Korea traditionally ruled the roost, the poor cousins of the East Asian technological revolution are catching up fast.

Many analysts believe that much of the reason for Korea's dominance in the semiconductor market is the Dynamic Random Access Memory chip (DRAM). The DRAM uses separate capacitors to store each bit of data. Basically, it is a simpler alternative to the more traditional Static RAM (SRAM) memory chip, which uses more components to store data.

Although American company Intel first developed the DRAM in 1971, it was the Japanese who first started to put serious money into producing the new chip. During the 1980s, Japanese semiconductor manufacturers dominated the global market, with an 80% share of sales in 1986.

However, according to Hayato Yoshioka of the Tokyo Institute of Technology, Japanese DRAM chips were produced mainly for mainframes. While these heavy duty computers started to be used less and less, the Personal Computer market started to boom. Yoshioka says Korea was able to specialize its manufacturing, starting on the mass-production of smaller, low-priced DRAMs specifically for PCs.

While Japan's DRAM sales have plummeted since the 1980s with no sign of recovery, Korea's have grown and have never looked back; Korea had almost 50% of the DRAM market share in the 2000s.

Kim Jun-yeon is a former engineer at Hynix, a Korean semiconductor manufacturing heavyweight. He was part of the Yield Enlargement Team in Seoul, and thinks that Korea is naturally better disposed to making cost-effective computer chips.

"Korean manufacturers are excellent at making memory products because we have cheaper labor costs than the USA or Japan. Korean technology is also specialized. It is suitable for making small memory products, things which have been in high demand until recently," says Kim.

Many think that if Korea wants to stay at the top of the world semiconductor market, companies here will have to move with the times. Samsung might lead the world in sales of DRAM and Flash memory used for USB memory sticks and camera memory cards, but many believe that non-memory chips are the future for Korean companies.

Kim explains that while countries with cheaper labor costs start to work hard on memory chips, Korea will lose its competitive edge to other East Asian competition. He says: "Korean companies have traditionally focused on making memory chips, but China and Taiwan are slowly starting to take that market over. We have to follow the US and Japanese lead . we need to try to put money into developing CPU chips."

Although the romantic idea exists that Korea works all on its own to produce a thriving semiconductor business, most analysts admit this is not the case. Insiders say that much of the technical machinery they use in Korean semiconductor plants is bought from Japanese and American suppliers. Hynix and Samsung are both trying to develop machines of their own which are capable of treating materials for use in circuits and chips, and much depends on positive R&D results.

Kim Jun-yeon, formerly of Hynix, agrees. "If we continue to get good quality machines from abroad, there is every reason that the semiconductor industry in this country will continue to bloom. We are also working to develop this machinery by ourselves, but sales will drop sharply if we don't have high-quality machinery from somewhere," he says.

"If machinery companies like Applied Material (USA) and Tokyo Electronics (Japan) keep on developing field technology for semiconductors, it will be a serious boost for the Korean semiconductor industry. Applied Material has developed a new etching machine which Samsung and Hynix can use to mass produce ground-breaking new chips."

Lee Myung-jong of Taiwen Technology believes specialization and a change of government policy are needed in order to secure a successful future for the semiconductor business in Korea.

"We tend to rely on a handful of major companies to lead the way in the semiconductor industry here, the likes of LG, Samsung and Hynix. We need to provide state support for smaller, more specialized companies. That is the policy that the Taiwanese government has pursued for some time now, and it has greatly contributed to Taiwan's sudden rise as a major power in semiconductors," says Lee.

Former Hynix employee Kim Junyeon warns that Korean manufacturers need to change the way they treat their employees or risk losing staff after only a few years in the job. He says: "Korean semiconductor companies are very good at developing their products, but I would not recommend people to work in that business here. The hours are overlong, there are often no weekends and getting time off is almost impossible."

Kim believes that only a change of attitude at the highest level will ensure that semiconductor industries are able to keep hold of their staff. He explains: "The way these companies treat their employees, the atmosphere at work, it should all be changed. The alternative is that a lot of engineers will want to give up their jobs after just a few years' work. Companies have to realize that money is not only the only incentive for workers in this country."

Korea still sits proudly at the top of the world semiconductor league table, giving people in this country something to be rightly boastful about. However, unless companies here behave more pragmatically . by investing in the future and treating their staff a little more like humans - it might not stay there for too much longer.